Best Buy 2003 Annual Report Download - page 21

Domestic Segment
U.S. Best Buy Stores
At the end of fiscal 2003, we operated 548 U.S. Best Buy stores totaling approximately 24.2 million retail square feet.
U.S. Best Buy stores are serviced by the following major distribution centers:
Location Square Footage Owned or Leased
Findlay, Ohio 1,024,000 Leased
Staunton, Virginia 725,000 Leased
Dublin, Georgia 742,000 Owned
Dinuba, California(1) 1,039,000 Owned
Ardmore, Oklahoma(2) 565,000 Leased
Bloomington, Minnesota 425,000 Leased
Edina, Minnesota (entertainment software)(3) 326,000 Leased
Franklin, Indiana (entertainment software) 715,000 Owned
(1) The Dinuba, California, distribution center was expanded from 644,000 square feet to 1,039,000 square feet during fiscal 2003.
(2) We recently broke ground on a new distribution center in Ardmore, Oklahoma. The distribution center will be located north of the
existing location in Ardmore, Oklahoma, and will be owned. The new distribution center is scheduled to open in fiscal 2005. The
existing location is being replaced in order to meet the expected increased demand for technology products and services. The new
facility is expected to serve 98 U.S. Best Buy stores when it initially opens and will have the ability to serve up to 125 U.S. Best Buy
stores in Arkansas, Kansas, Louisiana, Missouri, New Mexico, Oklahoma and Texas.
(3) At the end of fiscal 2003, the Edina, Minnesota, distribution center distributed entertainment software to certain U.S. Best Buy
stores. We are in the process of relocating the Edina distribution center’s services to our Franklin, Indiana, distribution center.
Following the transition expected to be completed in fiscal 2004 and coinciding with the expiration of the current lease, we will vacate
the Edina facility.
In addition, U.S. Best Buy stores lease space in 17 satellite warehouses in major metropolitan markets for home delivery of major
appliances and large–screen televisions. U.S. Best Buy stores utilize approximately 2.4 million square feet in these warehouses. In the
first quarter of fiscal 2004, we opened an additional 720,000−square−foot owned distribution center in upstate New York.
Effective March 31, 2003, Best Buy Co., Inc. moved its principal corporate offices into a new 1.5 million square−foot facility located
in Richfield, Minnesota. The new corporate campus replaces existing owned and leased corporate office facilities. In addition to
owning this new facility, we continue to own two facilities in Eden Prairie, Minnesota, aggregating 540,000 square feet, which
previously served as our principle corporate offices. These facilities are currently for sale. At the end of fiscal 2003, we also leased an
additional 550,000 square feet of office space in close proximity to the owned facilities.
Magnolia Hi−Fi
At the end of fiscal 2003, we operated 19 Magnolia Hi−Fi stores totaling approximately 189,000 retail square feet.
Magnolia Hi−Fi leases an 80,000−square−foot distribution, warehouse and office facility in Kent, Washington, of which
approximately 54,000 square feet are used for distribution and warehouse operations, with the remainder dedicated to a service
department and corporate administrative functions. In addition, Magnolia Hi−Fi utilizes a 13,000−square−foot leased regional
warehouse in Hayward, California.
International Segment
At the end of fiscal 2003, we operated 104 Future Shop stores and eight Canadian Best Buy stores totaling approximately 2.4 million
retail square feet.
The operations of the International segment are serviced by two leased distribution centers located in Delta, British Columbia, and
Brampton, Ontario. The majority of merchandise, other than appliances, is distributed from these two distribution centers, which are
255,000 square feet and 434,000 square feet, respectively. Appliance sales in western Canada are fulfilled by the distribution center in
British Columbia; however, a third−party distributor is used to warehouse and ship appliance inventory in other parts of Canada,
primarily Ontario and Alberta.
The Brampton distribution center is expected to be expanded to 978,000 square feet by the end of fiscal 2005. In addition a
413,000−square−foot distribution center was purchased in Langley, British Columbia, during the first quarter of fiscal 2004. The
Langley distribution center will replace the leased Delta distribution center. The transition to the Langley facility is expected to be
completed during fiscal 2004.